Interesting take on the housing bailout from the conservative/Libertarian leaning Reason Magazine. Here's a sampling:

Life support is expensive. When that troubled borrower gets a 20 percent haircut, his bank has to take a loss, and the bank is compensated for the loss by you, through the $50 billion Home Affordable Modification Program. The Treasury Department has paid more than $100 billion to allow the failed government-sponsored enterprises Fannie Mae and Freddie Mac to keep on guaranteeing questionable loans. Fannie and Freddie, in turn, have been expanding rather than reducing their loan portfolios—the opposite of what you’re supposed to do when you’ve got an unmanageable debt load.

According to the Federal Housing Finance Agency, “unemployment” and “illness” account for just 9 percent and 6 percent, respectively, of overall defaults. “Excessive obligations”—which in English means you bought more house than you could afford—causes twice as many defaults as unemployment. And the shockingly high rate of re- defaults on modified loans—more than 60 percent in some classes— argues strongly against loan modification as a public interest.